UPMEnergy

One factor can differentiate the winners of the green hydrogen game

Story 11.5.2022 0:00 EEST

In our previous article, we discussed the turbulent energy market's challenges to green hydrogen production. As energy accounts for up to 85% of the operating expenses of a hydrogen producer, managing the company's energy matters optimally is one of the crucial success factors in the industry.

Green hydrogen and energy optimisation - a match made in heaven

With energy optimisation, a hydrogen producer can buy and use electricity when it’s at a low price. Similarly, it can pause its operations temporarily when prices are spiking. In this way, the producer can make sure it always buys electricity at the lowest possible price.

Energy optimisation is no new concept. Some players in the more traditional energy-intensive industries, such as heavy industry, have been experimenting with energy optimisation for quite some time.

Compared to heavy industry, hydrogen production is much more suitable for energy optimisation for multiple reasons:

  • The hydrogen production process is highly flexible
  • Production can be stopped and started immediately without time lag
  • Production breaks do not cause disruptions to the business
  • The operations and hydrogen production machines are easy to handle

These factors make energy optimisation easy to implement and run for hydrogen producers, offering attractive short- and long-term benefits.

Lower costs, long-term competitive advantage, and access to more investments

Energy optimisation provides several lucrative benefits for a green hydrogen company. Firstly, the cost savings it gets from energy optimisation are immediate and financially significant. Being able to source renewable energy at the lowest possible price and avoiding price peaks can genuinely lower the operating expenses. Ultimately, it also reduces the financial risks of running hydrogen production.

Secondly, systematic energy optimisation can provide a long-term competitive advantage in the increasingly competitive green hydrogen market. A hydrogen producer with lower operating costs and higher profit margins is also more attractive to investors.

However, there is a key challenge in tapping into the benefits of energy optimisation: in-depth expertise on how the electricity market works and optimizing energy consumption. Typically, hydrogen companies do not have experience and knowledge of operating in the electricity markets. Furthermore, having in-house energy market expertise might not be a core competence they want to invest in. Thus, working with an experienced energy optimisation partner, such as UPM Energy, is much more attractive.

 

“Working with us, a hydrogen company can fully focus on their core business. We help them ensure they get electricity at the lowest possible price.”

- Anne Särkilahti, Director, Business Services at UPM Energy.

 

UPM Energy’s Beyond Spot energy optimisation is a holistic managed service. The hydrogen company can trust that energy experts with decades of experience in energy optimisation handle their energy matters.

Would you like to hear more about how energy optimisation benefits the green hydrogen industry?

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